Science-fiction staple new entry in high-speed Net

Lasers that deliver Internet access through glass windowpanes could prove to be a powerful weapon in the battle for high-speed Internet customers.

3 January 200211:43 am AEDT

The former president of AT&T's wireless unit has left a
multimillion-dollar payday behind for the stuff of science fiction.

Dan Hesse could have stayed on through an upcoming lucrative spinoff of AT&T's
wireless business, despite being passed over for the top spot in the new
organization. Instead he chose to become chief executive at TeraBeam
Networks, a stealthy start-up that plans to deliver the Internet to
metropolitan businesses via laser beams, an unproven technology with plenty
of potential but some weather-induced limitations.

By delivering Internet access, corporate data and other services through
glass windowpanes via beams of light, companies such as TeraBeam believe
they can offer communications services faster and at lower costs than
competitors. Unlike competitive technologies such as cable or copper
broadband connections, fiber optics, or high-speed "fixed" wireless dishes,
lasers do not require costly wireless spectrum licenses, access to rooftop
rights-of-way, or trenches under city streets, proponents say.

"There's a tremendous amount of potential for free space lasers, especially
when laying fiber is a problem," said Vincent Chan, a professor of
electrical engineering, astronautics and computer science at Massachusetts
Institute of Technology.

Lasers have promise when compared to competitors such as fixed wireless
technologies because of the far greater speeds at which they can transmit
voice and data traffic. Lasers can deliver communications at least 10 times
faster than most fixed wireless systems and do not require expensive
regulatory licenses. Some experts suggest there simply is not enough
wireless spectrum to supply similar download speed rates.

"It was a difficult decision to leave," Hesse said. "There were tremendous
financial incentives to stay. But when I saw the TeraBeam technology, I've
never seen anything that had quite the potential to disrupt the whole
industry because it is so much better than anything else out there."

Dozens of communications companies are racing to build urban networks in and
around the nation's largest cities to connect businesses to high-capacity,
long-distance pipes. Analysts believe these networks will be a fierce
battleground among many companies and various technologies, potentially
including lasers.

Interest in "free space lasers"--invisible beams of light within a region of
the communications spectrum unregulated by the Federal Communications
Commission--is mounting as service providers such as TeraBeam reveal their
plans and established equipment providers including Lucent Technologies
embrace the technology.

The lasers, targeted at small and medium-sized businesses in urban areas,
could cut significantly into the market for fixed wireless companies such as
Teligent and WinStar Communications, digital subscriber line (DSL) providers such as Covad Communications, and local phone companies and
other network operators.

"The pros are very short install times. It doesn't take any time at all to
establish a connection," Chris Nicoll, director of infrastructure analysis
at market watcher Current Analysis, said.

Laser service providers install receiver equipment near a window in their
customers' offices, while originating the signal from a nearby office
building, often rented with the sole purpose of housing the service
provider's gear. The equipment uses lenses, similar to those found in
telescopes, to project the invisible beams of light.

But some industry experts say susceptibility to foul weather leaves lasers
far from an ideal solution. Heavy rain, snow, sometimes turbulence in the
air and particularly fog can attenuate laser signals and cause outages or
slow connection speeds, experts say. If the human eye has difficulty seeing
through the weather conditions, such as in thick fog, so will the lasers,
experts say.

"I think it's an augmentation technology," MIT's Chan said. "(Lasers are)
not perfect; 80 percent of the time you'll do well, and when there's bad
weather you'll need to be prepared to have downtime or slow service."

The lasers can penetrate fog at limited distances, but the equipment must be
put much nearer to the customer, increasing costs for both the service
provider and the customer.

Others foresee only a temporary role for laser-based communications in many
metropolitan area networks.

"I can see it being used to test areas for the viability of fiber in a
market or as a temporary connection while fiber is being built," Nicoll
said. "But I don't see it as a permanent technology.

"The gamble is: Are there enough of those niche markets?" he said.

Still others, including equipment manufacturers that have high hopes for
laser gear, believe it will be only one of many technologies utilized in
metropolitan area networks.

"We don't see it doing away with fiber, but there are many, many
times--bigger than a niche--where fiber is not appropriate or wireless has
interference issues and this will be an alternative," said Stuart Waldman,
director for Lucent's OpticAir laser product line.

Some experts believe free-space laser technologies will have
their greatest success in space where the light travels farther without
interference, particularly as a means to connect satellites for long-distance networks.

"That's a real killer technology," Chan said. "In the future I think it will
be very competitive with undersea fiber optic networks."

Formed in 1997, Seattle-based TeraBeam has been testing a laser-based
network in the Washington city since the beginning of the year. The company
expects to launch commercial service in Seattle by the end of the year and
expects to start service in most major U.S. markets and some international
cities within three years.

Separately, a handful of Lucent customers have been testing the OpticAir
gear. The company expects to begin selling the products commercially in
early April.

Despite the early nature of the largely untested market, some service
providers are beginning to consider using lasers for their high-bandwidth
capabilities.

Broadwing, the communications company formed by the merger of Cincinnati
Bell and IXC Communications, is eyeing free space laser technologies as a
way to break into new local markets.

"This holds the greatest potential for a major disruptive technology shift
in communications as I've seen in 20 years in the industry," Broadwing chief
executive Rick Ellenberger said. "We're real believers in lasers. Long term,
we think the laser is much more exciting (than fixed wireless)."

Broadwing has tested free space laser technology for months and is
considering an investment in TeraBeam, according to executives. TeraBeam
recently closed a third round of funding but declined to reveal investor
names or the amount of money.

The emerging industry already has been careful to avoid the space-age
associations with comic book laser guns and eye surgery lasers.

"This you can look right into, even with binoculars, and it doesn't harm the
human eye," said TeraBeam vice president of business development Stephen
Gartside, noting the U.S. Food and Drug Administration doesn't require any
warnings on usage of free space lasers.

The lasers used for communications networks cannot be viewed by the naked
human eye because of the frequency at which they operate.